The difference in shopping behaviour of generation Z and the millennial

It has been seen that each generation have their set of values based on technology and exposure that alter their responses towards advertisements and brand loyalty (Acar, 2014). It is important for the e-retailers to stay abreast of the latest trends from the shift in generations. Gen Z is the newest generation and comprises of people between the age bracket 4 to 24 years. Whereas millennial generation comprises of those who are between 23 to 38 years of age. Consumers falling in these groups are young and influential.

Although the Gen Z shares many similarities like tech-savviness and affinity with social media; with the millennials yet there are some stark differences in their online shopping behaviours. With respect to the spending power, millennial consumers spend around $600 billion a year on online shopping and are regarded as the biggest consumer segment whereas that of Gen Z is around $143 billion (AccuData, 2017). Both these generations are different as compared to their earlier generations mainly owing to the higher rates of Internet adoption.

Gen Z is one of the most highly educated generations in history and its representatives can be described as technologically savvy, cynical and practical. On the other hand, millennials can be regarded as the first high-tech generation, driven by consumption and are sophisticated towards online shopping (Lissitsa & Kol, 2016). Both groups prefer to shop online, however, millennials are content with the conventional method of buying, i.e. point, click and buy. Whereas Gen Z is more concerned about the complete experience of shopping including the delivery time, feedbacks along with a good user interface design.

Understanding the online shopping behaviour of millennials

Previous studies have shown that around 54% of the total purchases of this generation is online with 67% of the millennials preferring to shop online than in a local store (Valentine & Powers, 2013). The main reason behind their preference towards online purchase is the ability to make comparisons between different products as well as their prices. They are also influenced to a large extent by the review of their peers and special offers and discounts. The millennials prefer speedy transactions and do not mind spending time in searching for a discount coupon before making a purchase. Statistics show that 35% of the millennials tend to search online for coupons before a purchase. It was found that 36% of the total purchases of millennials were made using their mobile devices, 24% using computers and 40% of the purchases were made from local stores (Bellman, Teich, & Clark, 2009).

On the basis of gender, it was found that most of the men tended to be more favourable towards online shopping in general (Jackson, Ervin, Gardner, & Schmitt, 2011). Contritely, women shopping tended to make more than 70% of their purchases from local retail stores. Recently, there has been a shift in the trends as an increasing number of men and women have been researching products and making purchases online (Valentine & Powers, 2013). This generation consists of mostly working individuals that have high disposable incomes and therefore are able to make expensive purchases online. Most of the products that the millennials bought online included:

  • apparels and accessories,
  • followed by automotive parts,
  • consumer electronics,
  • flowers and gifts,
  • food and beverage,
  • health and beauty products amongst others.

Moreover, this generation prefers recommendations over social media connections over advertisements. They need to be viewed as omnichannel shoppers who are more likely to compare and explore and then take a purchase decision. Millennials do not tend to be very loyal towards a brand and tend to make a purchase that defines who they are.

The online shopping behaviour of Gen Z

Gen Z includes youngsters who tend to spend more than 5 hours every day on the internet (Jenkins, 2018). It means that in order to induce them to make a purchase, businesses need to connect with them online. The challenge in attracting the attention of buyers of this generation is that they detest advertisements on their phones which is also the main access points to reach them.

Even when this generation makes a purchase in a local store, they use social media and search engines to compare and tend to weigh in on their purchase decision (Priporas, Stylos, & Fotiadis, 2017). They prefer to buy from brands that use social influencers for endorsements than celebrities. They have an increased preference to buy from brands that are committed towards social causes.

Millennials form a big consumer base for e-retailers with a gradual increase in the share of generation Z shoppers. Social media is the new disruptor in e-commerce with an increasing share of digital channels. Even though new shopping models are in demand, local stores are popular among both generations as a shopping medium. In addition to this, psychological factors, cultural factors and social marketing strategies have an impact on their shopping behaviour.

References

  • Acar, A. B. (2014). Do intrinsic and extrinsic motivation factors differ for Generation X and Generation Y? International Journal of Business and Social Science, 5(5), 12–20.
  • AccuData. (2017). This Is How Generation Z Makes Buying Decisions.
  • Bellman, L. M., Teich, I., & Clark, S. (2009). Fashion accessory buying intentions among female millennials. Review of Business, 30(1), 46–57.
  • Dennis, C., Morgan, A., Wright, L., & Jayawardhena, C. (2010). The influence of social e-shopping in enhancing young women’s online shopping behavior. Journal of Customer Behaviour, 9(2), 151–174.
  • Jackson, L., Ervin, K., Gardner, P., & Schmitt, N. (2011). Gender and the Internet: Women communicating and men searching. SEx Roles, 44(5–6), 363–379.
  • Jenkins, R. (2018). This Is How Generation Z Makes Buying Decisions. Inc. Magazine.
  • Lissitsa, S., & Kol, O. (2016). Generation X vs. Generation Y. A decade of online shopping. Journal of Retailing and Consumer Services, 31, 304–312.
  • Priporas, C. V, Stylos, N., & Fotiadis, A. K. (2017). Generation Z consumers’ expectations of interactions in smart retailing: A future agenda. Computers in Human Behavior, 1–8.
  • Valentine, D. B., & Powers, T. L. (2013). ONLINE PRODUCT SEARCH AND PURCHASE BEHAVIOR OF GENERATION Y. Atlantic Marketing Journal, 2(1).

Jaideep Bhattacharjee

Research consultant at Project Guru
Jaideep is an engineer in marine engineering and was a part of the Mediterranean Shipping Company for a year.With expertise in the technical field, he is good with numbers and statistics and mostly uses SPSS.His expertise are in the field of marketing, human resources management, change management, strategic management and Finance. His strengths also lie in framing strong literature review and interpretation. Being an avid follower of Manchester United, he also takes interest in sports especially football, cricket and chess.

Related articles

Discuss

We are looking for candidates who have completed their master's degree or Ph.D. Click here to know more about our vacancies.